The STAT proteins are latent cytoplasmic transcription factors that are activated by tyrosine phosphorylation through cytokine and growth factor interaction with their specific cell surface receptors. STATS regulate many genes that are crucial to innate immunity (mediated through STATs 1 and 2 and interferons), adaptive immunity (mediated by IL-12, IL-4 through STATs 4 and 6 and a host of other cytokines) as well as growth, development and differentiation (mediated through dozens of receptor tyrosine kinases activating particularly STATS). Not only the activation but the regulated inactivation of the STATs are vital to proper functioning since over-activity particularly of STAT3 in cancer is widespread. Drawing on new structural and cellular biochemical data we have proposed a new model of inactivation. This process of dephosphorylation appears to require intra-protein contacts and extensive mutagenesis of the known and proposed contact interfaces in both STAT1 and STAT4 is described to study both in vitro and in vivo interactions and resulting effects of such interactions. In many human cancers STAT3 is persistently activated not due to STAT3 mutations but to overactivity of kinases that activate STAT3 or loss of negative acting proteins, leading to a resistance to apoptosis. We believe that the best way to intervene in STATS dependent cancer cells is direct inhibition of STATS in the act of stimulating transcription. To this end we study the interaction of STATS with other nuclear proteins whose interactions are required for STATS dependent transcription. We have found and will continue to study a STATS/cJun/cFos interaction on a model enhanceosome and extend these studies to genes (e.g. Bcl-xL) that establish an anti-apoptotic shield in the presence of persistently active STATS. Details of persistently active STATS in anti-apoptosis will be studied by abruptly removing active STATS by treatment of cells with anti IL-6 antibodies and then determining the balance of mRNAs and proteins related to apoptosis. From the studies of STAT1 dephosphorylation and of STATS protein contacts will come discreet targets for development of small molecule inhibitors. Inhibition of dephosphorylation of STAT1 would prolong interferon action;inhibition of STATS activity would induce apoptosis in cancer cells. These basic studies coupled with drug discovery programs, for example in industry, should definitely lead to new drugs in the treatment of cancer and of viral infections.